Brown: Legal Terminology, 5 th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All...

Brown: Legal Terminology, 5th ed. © 2008 Pearson Education, Upper Saddle River, NJ 07458. All Rights Reserved.

Legal TerminologyFifth Edition

by

Gordon W. Brown

PowerPoints prepared by Kimberly Lundy


Chapter 19

Personal Property

and Bailments


Personal Property

Personal property (also called personalty or chattels) – anything subject to ownership other than real property.


Types of Personal Property

Tangible property – things that have substance and can be touched.

Intangible property (also called a chose in action) – not perceived through the senses, i.e., patents and copyrights.


Types of Personal Property (Cont’d.)

Fixture – personal property attached to real property.

Trade fixture – personal property necessary to carry on a trade or business.


Sale of Goods

The Uniform Commercial Code (UCC) is the law governing commercial transactions. Example: Contracts for the sale of goods.


Sale of Goods

Goods – anything that is moveable. Future goods – goods not yet existing.

Fungible goods – usually sold by weight or measured in units.

Conforming goods – goods in accordance with the contract.


Contract for Sale of Goods (Cont’d.)

Nonconforming goods – goods not in accordance with the contract terms. Seller may cure (correct the defect within

the contract period).

If seller does not cure, buyer has right to cover (buy similar goods and sue for the difference).

Identified goods – specific goods selected as the subject of the contract.


Sales Sale – defined by UCC as the passing

of title (ownership) from seller to buyer for a price. Bill of Sale – written evidence of transfer

of personal property. Contracts to Sell – if title is to pass in the

future. Sale on Approval – if goods are for

buyer’s use and can be returned even if conforming.


Sales (Cont’d.)

Sale or Return – if goods are primarily for resale and may be returned even if conforming.

A gift is not a sale because donee (recipient) pays no price to donor (gift giver).


Bulk Transfers

Bulk Transfer – disposes of entire stock in one transaction.


Contracts for Goods

Output contract – contract to sell all the goods a company manufactures.

Requirements contract – contract to sell all the goods buyer needs.

Shipment contract – seller turns goods over to a carrier for delivery to buyer. Title and risk of loss (responsibility for damage or

destruction) pass to buyer when goods go to carrier.


Contracts for Goods (Cont’d.)

Shipment contract or f.o.b. place of shipment – free on board (no delivery charge) to place of shipment.

Destination Contract – f.o.b. place of destination. Title and risk of loss pass to buyer when

goods are tendered at destination.


E-Commerce

Electronic commerce – the buying and selling of goods and services or transfer of money over the Internet.


Warranties

Warranties – guarantees by sellers of goods as to their products.


Express Warranties

Express warranty – seller’s statement of fact or promises about goods. Full warranty – requires seller to repair or

replace defective goods or refund purchase price.

Limited warranty – label required for anything less than a full warranty.


Implied Warranties

Implied warranties – imposed by law. May be excluded by seller if

conspicuously noted. Example: “as-is” sales.


Implied Warranties (Cont’d.) Warranty of merchantability –

warranty by merchant that goods sold will be fit for the ordinary purpose of their use. Merchant – person who sells goods of the

kind sold in the ordinary course of business or who has knowledge or skills peculiar to those goods.Not given by private parties.


Implied Warranties

Warranty of fitness for a particular purpose – when a buyer relies on seller’s skill in selecting goods, seller warrants they are fit for the purpose for which they are to be used.


Warranty of Title

Warranty of title – warrants that title is good. Made by both merchants and private

parties. Cannot be excluded by the seller.


Auction Sales

Auction – sale of property to highest bidder (offeror). Auction with reserve – seller may

withdraw goods without accepting highest bid.

Auction without reserve – goods must be sold to highest bidder.


Bailments Bailment – Bailor (owner of goods) places

personal property in possession of another (bailee) without transfer of title.

Mutuum – borrowing goods with intent of replacing with a similar amount of same goods.

Not a bailment, as exact goods are not returned.


Types of Bailments Mutual benefit bailment – both bailor

and bailee benefit (i.e. leaving a watch to be repaired). Duty of ordinary care is owed.


Types of Bailments (Cont’d)

Gratuitous bailment – no consideration by one party in exchange for benefits. Bailment for the sole benefit of bailor

(i.e. storing a car at a friend’s house) – duty of slight care is owed.

Bailment for the sole benefit of bailee (i.e. lending car to a friend) – duty to use great care.


Wrongful Possession

Tortious bailee – one who has wrongful possession of another’s goods. Examples: taking goods without

authority or using another’s goods for other than agreed-upon purpose.

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